Meet today’s brazen and more frequently fraudulent jobseekers! Are you ready to deal with them?

If you are a jobseeker and wonder why the employer or their ATS (Applicant Tracking System) didn’t select you for an interview, it very well could be that another candidate did something to juice up their application or resume so as to move their name to the top of the shortlist. Is that fair/ethical or is it fraudulent? Fraud, by the way, occurs when one attempts to deceive. 

Crosschq is a tech vendor that helps employers improve their “quality of hire”.  They have a number of solutions and analytic tools that span the entirety of the hire-to-retire process. Their research arm, Crosschq Data Labs, recently analyzed “200,000 data points” that covered the first five months of 2023. What they learned is that more jobs candidates “are committing fraud during the application process”. 

They added:

Crosschq Data Labs found that candidates are almost four times more likely to intentionally misrepresent themselves than they were in 2021. Whether to cover up a skills gap or break in employment, fraud instances have skyrocketed, especially in the high-volume hiring sectors where some fraud rates exceed 7 percent. Crosschq Data Labs has shown that on average, candidates who were flagged as having committed fraud in the reference process will have 27 percent lower Quality of Hire scores.

The consequences of making these hiring/interviewing errors can be substantial (a prior employer of mine called them “PUREs”, standing for 'previously undetected recruiting errors'). A single bad hire is estimated to cost some firms around $100,000 based on some studies. For small-to-mid-sized firms, that economic hit can be very difficult to absorb. The cost is high as the firm must now spend twice for job postings, lost productivity for those who may have been training the fraudster, potential legal fees in terminating the individual, overtime paid to other workers to cover for the time when the bad employee can’t do the job, rework or refunds made to customers due to unsatisfactory work completed by the fraudster, etc. Bad hires cost real money. 

Beyond the dollars and cents lost, Crosschq noted:

Perhaps the most alarming takeaway from our research is that job candidate fraud is occurring in industries where an unsuitable hire could directly impact the well-being, safety or financial security of a significant population,” said Mike Fitzsimmons, CEO of Crosschq. “For example, our research uncovered job candidate fraud across school systems and healthcare organizations, as well as in financial institutions. The potential for nefarious activity can lead to significant harm, even with a single bad actor being hired.”

None of us would feel safe if the atomic energy plant manager, electrician or truck driver that was hired to do a job was unqualified to do so. Beyond the monetary losses, someone could get really hurt as a result. 

Why the uptick in fraud?

Fellow HR analyst William Tincup at Recruiting Daily noted:

A few things come to mind about why fraud is on the rise: (1) desperate times call for desperate measures, meaning candidates are more desperate now, (2) we’ve pulled back on screening and skills testing, and we’re waking up to the tricks that candidates play all the time, meaning we’re becoming more aware of fraud, (3) we’re hiring less so our scrutiny is more intense, meaning in an upmarket, we’re moving so fast, we probably don’t detect fraud until it is too late, etc.

Tincup's right about those causal factors but I suspect there could also be a technology angle or two to explore as well.  Let’s start with those online data bases, social networks and job boards that recruiters often tap to learn of passive and/or active jobseekers. These sites all have one common and big flaw: the data within them is usually self-reported and unverified. Remember, there’s a television show, Catfish, that’s dedicated to unmasking the duplicity found on social media and dating sites.

In one notorious example of this kind of fraud, MIT Technology Review reported:

At one point in July, there were over 1,000 LinkedIn profiles for individuals who, like “Mai Linzheng,” claimed to have graduated from Tsinghua University and to work at SpaceX. The eye-popping number even triggered patriotic Chinese influencers to lament the brain drain and accuse Chinese university graduates of disloyalty to their country. 

This caught the attention of Jeff Li, a Toronto-based tech influencer and columnist at Financial Times China. He confirmed on July 11 that he could find 1,004 Tsinghua graduates by searching for SpaceX employees on LinkedIn; this would have made the alumni group the largest at the company. But many accounts he saw claimed the exact same education and work experiences—suggesting that someone was mass-generating fake profiles.

"They all graduated from Tsinghua and went on to the University of Southern California or similar well-known universities,” Li says. “Besides that, they all worked at a certain company in Shanghai. Obviously, I suspect these are fake, generated data.” 

The problem with internet data sources is that humility (or truth) is not an asset on the Internet. Instead, the loudest, most active and most over the top content is what moves resumes to the top of search results and that’s what ends up in your recruiting pipeline.  Good people often finish last in the job search world.

No organization is immune

Your firm is not and will not be the only organization to be a victim of employment fraud. US readers undoubtedly remember the George Santos revelations as he began his term as a U.S. Representative. According to Time magazine:

During his campaign, Santos bragged about a robust career that he claimed began when he earned a degree from Baruch College and also studied at New York University. After school, Santos claimed to have had a finance career working at Citigroup and Goldman Sachs. In December, the Times first reported that none of these institutions had records of Santos’ enrollment or employment, and Santos soon confessed that he had lied on his resume and had never graduated from any college and didn’t work directly for either company.

“I’m embarrassed and sorry for having embellished my resume,” he told the New York Post.

What’s unfair and/or unethical?

The following acts by jobseekers are clearly unfair and/or unethical:

• Intentionally mislead recruiters by suggesting one has more experience, education, etc. than what they actually possess
• Claim that one possesses degrees, work experiences, job titles, grade point averages, salaries, etc. that one clearly does not
• Presenting half-truths 
• Having another person complete employment screening exams on one’s behalf

The unethical area is grey and getting greyer every day thanks to new tools that jobseekers can use. For example:

• Jobseekers that use AI tools to re-write their resume to better align with an employer’s job description could be quite unethical if the end result is a resume that stretches the truth to indefensible levels. If the AI tool suggests language that is not within the candidate’s actual work experience, education, etc., then claiming this is patently fraudulent. 
• AI tools that help move a marginal candidate up in the rankings while better skilled persons get displaced are not ethical.  They also trigger adverse economic and time consequences for employers as employers may have to do more in-person interviews to actually find the better candidates. 

The fraud Crosschq is reporting may only be the tip of the iceberg. Beyond their research findings, more fraud is likely to hit Recruiting organizations soon (if not already).  AI may accelerate the opportunity for fraud. 

• AI can be used to ‘perfect’ or to ‘write’ a person’s resume. Using AI to fix grammar or make minor edits is fine but using it to recommend a great resume for a given position is just wrong. 
• AI could be used to help people with poor language skills craft a great resume/application. This is especially bad for people applying for front-line, customer facing roles, jobs that require writing, or, other roles that require public speaking (e.g., being a consultant).

Measures and counter-measures

The initial glee that employers (and HR executives) have when new technologies are introduced is sometimes misplaced. Currently, many people are excited about what generative AI can do. What they need to focus on instead is what miscreants will do with these new technologies and capabilities. 

Military leaders understand this phenomenon well. Every time they create a new weapon, their enemies will create a new defensive tool to counter the effects of it. This game of measures and countermeasures keeps the parties in check especially if the countermeasures can be developed in a timely manner. 

Unfortunately, HR leaders have been inundated with new technologies hitting the market faster than countermeasures can be developed or implemented. Does the average HR leader know how employees and jobseekers will use VR, AI, Large Language Models, generative AI, etc. to their advantage? If you can’t answer that, then you can’t develop appropriate countermeasures either.  

I’m waiting for employers to develop new capabilities with new advanced technologies. For example:

• Can’t we use AI to discover the best ‘sleeper’ resumes or applications that a company receives? Why can’t smart tech look past keyword or skills matching to infer who likely has the best experience? 
• Should employers use AI to see how many other applicants are claiming very similar work experiences or other indicators of applicant fraud?
• Can smart AI tools determine the genuineness of a resume? Resumes that are too slick, too polished, and overly parrot the desired attributes listed in job description are likely to be the invention of an AI tool and not reflective of the actual employment history of the applicant. 
• Etc.

What else should employers do?

Employers need to be clear about the consequences that jobseekers will face if they lie or mislead a firm. Those consequences should be spelled out front and center on recruiting applications. If you lie and are caught, you will lose this position (that’s not negotiable) and have to repay any hiring bonus. You will also be permanently banned from seeking employment at this company or its subsidiaries. 

Employers should verify all potential employees.  You should never rush this or cut corners. In my own career, I’ve caught people claiming degrees they didn’t have, worked at places they didn’t, attended universities that never heard of them, said they held job titles that they didn’t, earned a big salary that they really didn’t have, etc. Liars and frauds are an omnipresent element of the human race. It’s HR’s job to figure out who is telling the truth. 

My take

This problem, hiring fraud, is not new – just the methods used by jobseekers may be evolving. Smart employers should demand better tools from software vendors to more effectively combat new kinds or manifestations of employment fraud.

I’ve found it amazing to help clients see all of the technologies they use on their side of key HR processes (e.g., recruiting). Then, I help them understand what people on the other side of these processes are using. This pictorial process design is illuminating as few people understand both sides of the situation and lack knowledge of the specific tools these non-employees have at their disposal. 

This HR arms race is a rapid one, too. So many tools that jobseekers can access are low/no-cost apps on smartphones or very low-cost cloud-based tools. It’s incredible how much power has shifted to jobseekers and smart employers have no choice but be cosmopolitan (i.e., to be aware of one’s environment) and fast, too.   

While there are already technologies that do reference checks and employment verification, there are always new gaps popping up. This is like a perpetual whack-a-mole machine. If your firm has an HR-IT group, are they as fully aware as they need to be?

It appears the bottom line is this - how many more PUREs will your firm hire?